Hamptons Mortgages has criticised lenders for pulling their 100% plus mortgages, saying they offered the only opportunity for struggling first time buyers to own their own home.
Jonathan Cornell, managing director of Hamptons Mortgages, says the inability of first time buyers to afford property will continue to weaken the UK’s housing market.
Following the total withdrawal of 125% mortgage products in the UK, Cornell says: “In the light of the weakening housing market, lenders are pulling their 100%-plus LTV mortgages at a rate of knots.
“It is a real shame to see so many products being removed from the market as in the current economic situation, these provided the only real hope for struggling first time buyers.”
As average house prices are now far higher than the average salary of a first time buyer, those without deposits relied on the funding provided by 100% plus mortgages to step onto the housing ladder, according to Hamptons.
Cornell also believes this will increase the risks of a housing market collapse.
“Unfortunately, the disappearance of so many 100%-plus LTV mortgages from the market will make it even harder for first time buyers to purchase a property,” he explains. “In turn, this may continue to weaken Britain’s already fragile housing market.”
Cornell criticised lenders, who he says were falling over each other to enter the market last year, but who are now rapidly withdrawing in the wake of the credit crunch.
“I hope that once the credit crunch is over and the fears over house prices subside, that we see these popular mortgages introduced,” adds Cornell.
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